Example of adjustments for accrued items, Accounting Basics

Assignment Help:

Q. Example of Adjustments for accrued items?

For instance assume Micro Train Company has some money in a savings account. On 2010 December 31 the cash on deposit has earned one month's interest of USD 600 though the company hasn't received the interest. An entry must demonstrate the amount of interest earned by 2010 December 31 and the amount of the asset interest receivable the right to receive this interest the entry to record the accrual of revenue is

578_Example of Adjustments for accrued items.png


Micro Train enters the USD 600 debit balance in Interest Receivable as an asset in the 2010 December 31 balance sheet. This asset accumulates slowly with the passage of time. The USD 600 credit balance in the Interest Revenue is the interest earned during the month. Evoke that in recording revenue under accrual basis accounting it doesn't matter whether the company collects the actual cash during the year or not. It enters the interest revenue earned during the accounting period in the income statement.


Related Discussions:- Example of adjustments for accrued items

Learning objectives of current ratio, Q. Learning objectives of current rat...

Q. Learning objectives of current ratio? - Analyze the transactions by examining source documents. - Journalize the transactions in the journal. - Post the journal entrie

Marginal and Absorption, the guinegog is a trader in portable cd-man. His b...

the guinegog is a trader in portable cd-man. His budgeted output is 5000 units per quarter. The following data was available for the year 1998: Direct labour @ $6 Direct material @

When common stock has a par value of $2, When common stock has a par value ...

When common stock has a par value of $2 and a market value of $15: 1.) the liability of the stockholders is $13 per share 2.) there will be additional paid-in capital of $1

Frank Woods Business Accounting, J Green''s financial position at 1 May 200...

J Green''s financial position at 1 May 2008 was as follows bank 2,910 cash 160 equipment 5,900 premises 25,000 creditors R smith 890 t thomas 610 debtors j car

What is internal control - control of cash, What is Internal control - Co...

What is Internal control - Control of cash Internal control refers to procedures and methods a business uses to protect its assets. Checks are written for all transactio

Summary of significant accounting policies, Q. Summary of significant accou...

Q. Summary of significant accounting policies? As part of their annual reports companies comprise summaries of significant accounting policies. These policies help users in int

Describe about assets, Q. Describe about Assets? Assets are things of w...

Q. Describe about Assets? Assets are things of worth owned by the business. They are as well called the resources of the business. Illustration includes machines, cash and buil

The owner''s equity of logan''s company, The owner's equity of Logan's comp...

The owner's equity of Logan's company is equal to one quarter of the total assets. Liabilities equal $60,000. What is the amount of owner's equity?

ACCOUNTING CONCEPT, What is the implication of applying accounting concepts...

What is the implication of applying accounting concepts wrongly?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd